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Labor Laws On Tipping

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feldman_amy Amy Feldman
Amy E. Feldman is a business commentator and legal business...
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By Amy E. Feldman

PHILADELPHIA (CBS) - After a recent episode of Kitchen Nightmares with Gordon Ramsey aired, the featured restaurant called Amy’s Baking Company was overwhelmed by outraged comments on Yelp over the owners’ treatment of staff, including pocketing the waitstaff’s tips. Apparently the restaurant was unaware that a show called Kitchen Nightmares would not end well for them. They were also apparently unaware of the labor laws on tipping.

Are you a waiter, bartender, or a manager in a restaurant? Here’s what you need to know.

A tipped employee is someone who earns more than $30 in tips a month. Under the law, tips are considered the sole property of the tipped employee, and an employer can only use an employee’s tips to offset the employer’s minimum wage obligation or as part of a tip pool.

Tip pooling, also known as tip sharing or tipping out, is a practice whereby a waiter is required to share some of his/her tips with other employees who customarily receive tips, like bartenders and it’s legal, so long as waiters aren’t forced to share tips with those who don’t customarily receive them, like dishwashers – or management – or there will, in addition to Gordon Ramsey’s shrieking head in your face, be legal consequences to contend with.

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